Navigating the Future of Insurance: Risk Management

Featuring: Mike Travis, Consulting Director, Underwriting & Matt Santos, Consulting Director, Underwriting

The insurance industry stands at a pivotal crossroads. Technological disruption, evolving client expectations, and systemic global risks demand a reimagining of how we assess, manage, and transfer risk. Underwriting consulting directors Mike Travis and Matt Santos share how these changes have redefined insurance and risk management – and how carriers must evolve to create resilience and stay competitive.

What are the most transformative trends or challenges shaping the insurance industry today?

Mike Travis:
The emergence of generative artificial intelligence (AI) that can help automate routine tasks, such as claims processing and underwriting triage, is significant. It’s important, however, that underwriters use these tools for support, rather than to outsource critical thinking or decision making.

Matt Santos:
Another transformative trend is the improvement of data-driven risk intelligence. Big data is no longer just a buzzword for referencing volume. It now enables more precision -- including the integration of data ecosystems to enhance risk segmentation, pricing accuracy and predictive modeling -- and supports underwriting decisions. This is particularly important in casualty, where there is high complexity in exposures.

How has the role of risk management and specialized underwriting expertise evolved in response to emerging global challenges like climate change, cyber threats and geopolitical instability?

Matt Santos:
Risks today are no longer siloed; they are systemic, dynamic and often unmodeled or even unknown. Some previous examples included leaded gasoline, asbestos or chlorofluorocarbons (CFCs), which created more disruptions and problems than they solved. Today’s trends can include Microplastics and PFAS. Future risks can include bioengineering, nanotech, etc. This shift demands a move from reactive risk transfer to proactive mitigation, resilience-building and integrated risk transfer solutions.

What’s more, curiosity and continuous learning are becoming indispensable skills for underwriters. It’s important that they stay up to date with emerging trends, risks and rapid innovation and work closely with broker partners and the risk management community. Underwriters should prioritize providing viable mitigation and transfer solutions that contribute to a holistic approach to understanding and managing the client’s cost of risk.

Mike Travis:
I’ll add that a robust approach is needed from both risk managers and underwriters to identify and respond to emerging technological, environmental and geopolitical risks.

Also, at CNA we encourage and support continuous, lifelong learning and believe that an organization’s culture can be a source of sustained competitive advantage.  Outside of supporting traditional talent development through industry accredited programs, our underwriters benefit from both internal and external subject matter expertise in both the US and Canada.  Internally, Risk Control/Engineering and product line underwriting leaders play a vital role consulting with our teams. Externally, access to third party resources is vital in identifying emerging threats be they natural (wildfire, flood), or manmade (PFAS, lithium ion) through a multitude of sources (Bests, Moody’s, risk analytics firms, reinsurers, brokers, etc.) 

In what ways do you think insured expectations are changing, and how should carriers respond to stay relevant and competitive?

Mike Travis:
First, I would say that client expectations have changed beyond financial protection. They expect customized solutions on-demand along with some self-service capabilities enabled by technology. Insurers must make sure that their systems and workflows are nimble and agile enough to satisfy these expectations.

Secondly, it’s clear that insureds are aware of current market conditions, like pricing, capacity and coverages, with a focus on rate and premium savings. Insurers need to emphasize their value proposition in this environment – such as know-how, underwriting, risk control, and claims handling – while remaining consistent in their underwriting approach and flexible in response to the market. That is certainly CNA’s approach.

Matt Santos:

Relationship building and client engagement through consistency and advisory are also key because insureds are increasingly expecting carriers and underwriters to understand the intricacies of their business, anticipate risks and offer strategic guidance.

What role do you think data and analytics will play in underwriting and claims management over the next decade?

Mike Travis:
Like any commercial enterprise, insurers are in business to make a profit in an industry that is becoming highly commoditized. Unlike other industries where products are sold with a profit margin, insurers may have to price policies lower than the associated risk. Underwriting profitable business and understanding those associated costs with attention to expense management are critical components of success. Data and analytics from third-party sources across various domains such as industry, environmental, individual and geographical, contribute to how thoroughly we can understand these risks.

Matt Santos:
Data analytics may evolve from merely supporting underwriting judgment to strategically enabling it. Today, underwriters rely on a set of skills and knowledge built through experience. This can include a general understanding of legal frameworks (especially in North America, where there can be interactions between multiple jurisdictions including federal, provincial/state and municipal, which might add complexity), insight into market dynamics and industry-specific nuances, as well as familiarity with the product and its positioning in the market.

Looking ahead, data handlers, including generative AI, may help shift the focus beyond exposure data. They could accelerate how knowledge is built and monitored, using real-time indicators tailored to the exposure, jurisdiction and legal environment. This would support both underwriting and claims teams in anticipating risk, not just assessing it, and contribute to more informed, proactive decision-making processes for accepting risks or managing claims. Ultimately, leveraging the power of AI for underwriting and claims management can help drive profitability.

How do CNA’s underwriting teams balance the need for customized solutions with the pressure for efficiency and scalability in underwriting?

Matt Santos:
Efficiency and scalability derive from having access to the right tools and the right data, not from forcing a one-size-fits-all solution. This means using technology like underwriting platforms, and even generative AI to streamline workflows while preserving sound underwriting judgment. It’s also about empowering professionals at different stages of development, ensuring the tools help structure their decision making, rather than making the decision for them.

Mike Travis:
One approach to this – and the strategy we currently use at CNA – is through increased specialization and clearly articulating risk appetite to brokers and clients. Specialization in the risk management space is a key success factor for us, along with a service offering that includes multi-line products and international capabilities.

Although the insurance industry is in constant flux, uncertainty and emerging global challenges invite proactive use of technology, underwriting and claims acumen and a refreshed approach to meet client expectations.